All Forum Posts by: Carlos Valencia

Hello Kelly, 

House hacking is alive and well and yes depending on what market you are in it will be challenging to acquire something that will allow you to live rent free. The best way to position yourself to have better cash flow is to buy a property that is livable but needs rehab. Acquiring a property that needs rehab allows you to build that sweat equity once you rehab it. This will also allow you to rehab the property at your own pace assuming you buy it using a conventional loan. Once you are done rehabbing you can begin leasing out the property at max rents and put yourself in a better position. Make sure to do your research to see what is the max rents you can get for the property as well as what will it look like once you move out. Will you be negative or will you cashflow or break even? Its important to make sure you can break even or be very little in terms of being negative. Any amount that you are negative carries over and affect your overall Debt to income ratio. You want to make sure your debt to income ratio is available as possible to help you acquire your next house hack and you rinse and repeat until you no longer can use that strategy. 

@Albert Bui @Matthew Kwan

Hello Bob, 

You can get Helocs on your investment properties up to 75% CLTV. As long as you can meet the guidelines to get 75%CLTV and have enough equity then you can proceed. If you do qualify you would basically be refinancing your current Heloc and use the new Heloc to pay it off the original Heloc. Best to do Heloc when the property is being used as your primary so you can ge the max CLTV of 90% because once its considered an investment your max is 75%CLTV. Plan accordingly so you are set up appropriately.

@Albert Bui @Matthew Kwan

Hello Jace, 

We work with some lenders that can go up to 80% LTV for rate and term refi. It wont be cheap though. This will cost you about 1-2 points depending on your scenario. Your looking at a rate around high 8s to low 9s possibly. We would need to review your scenario more in depth to see what is the best option for an 80% rate and term using DSCR.

@Albert Bui @Matthew Kwan

Hello Archie, 

Even if you had a high income job DTI is always important because you should know where you stand at all times if you want to continue to use conventional financing for your future investments. You can always use DSCR financing where you use the properties rental income to qualify. DSCR loans do not look at your DTI only the rent to mortgage ratio. Lastly do keep in mind when calculating DTI the lenders do use taxes and insurance even if the property is paid off but if you have enough rental income to cover that monthly expense then you will eliminate that with that rental income. Its always good to plan ahead and review your scenario to make sure you are ready to execute your next deal when you come across one rather than just wing in it and find out you are stuck between a rock and a hard place.

@Albert Bui @Matthew Kwan

Hello Brian, 

Cash flow in the bay area is very challenging. If you don't want to miss out maybe just buy it as your primary and live in it until you can actually at least break even. Then you can buy another property at that time but at least your appreciation on the property will keep increasing. Just remember when it comes to Real Estate investing it takes time to grow your real estate portfolio depending on how much risk your are willing to take. Maybe you can even refinance in the future if rates improve more to help cash flow. If you can afford this property now just do it and sit on it. Worst case if its too expensive to cash flow just sell it so you can get your money back. 

@Albert Bui @Matthew Kwan

Hello Rene, 

Congratulations at least your not negative. Depending on the market your investing in you'll be lucky to break even or cash flow 100 like yourself. Even by looking at the bigger picture if you will be holding the rental long term to get some of the appreciation over time and its not affecting your income negatively then it may be smart to continue. But if your looking to cash flow like $500 or more per month you might want to look into more cost effective markets where you can purchase a property very cheap and the rents will give you that type of cash flow your looking for. You just need to ask yourself what is it that you are looking for now? Huge cash out in the future from appreciation or active income from rentals now? 

@Albert Bui @Matthew Kwan

Hello Daniel, 

For someone new who is looking to begin their real estate investing journey the best and most conservative option is to start with a house hack strategy. House Hack is when you purchase the property as a primary and lease out the rest of the rooms or if you buy a 2-4 unit you can rent out the other units and live in one unit. Great thing about this is that you can bring in as little as 3-5% down of the purchase price. This way you don't need too much capital, well depending what market your in. In order to get started just make sure you have high enough W2 or self employed income that you can qualify for the monthly mortgage plus savings for the down payment and closing cost. Make sure your credit is also in the 700's or higher to take advantage of better pricing. Then your off to the races with your first investment property. Then you rinse and repeat this process. 

@Albert Bui @Matthew Kwan

Hello Christine, 

The best solution will be to get your credit score back to at least 640 but that will limit your combined loan to value. You will only be able to go up to 60%. Best case is if you can at least improve your score to 680 to be eligible to tap into 70% which that would get you close to the 100k that you are looking for. Then we would have to check your DTI can handle the Heloc payment as well. If you are not in a rush work on improving your score and then revisit once you have improved it. Keep in mind the ratios and credit score is for Primary occupancy.

@Albert Bui @Matthew Kwan

Hello Fahimeh, 

I'm assuming you are a realtor and you are working with some cash buyers. Make sure you know what your cash buyers buy box is. This way you can get better deal that fit their buy box. When talking to the wholesalers let them know what your looking for to see if they have any that meet that criteria if not they can keep a look out for what you need. Another option is you can start wholesaling your self since you have buyers you just need to find the deal. The hardest part is that finding a deal then trying to convince the seller to sell it to you. If you find it you can at least make your assignment fee. Attend local meetups and look for other social media groups with real estate topics like wholesaling. 

@Albert Bui @Matthew Kwan 

Hello Hana, 

No this is not normal. If things change you should be informed to make sure that you are ok with the new changes before moving forward. It appears that this lender either is inexperience or they do not do a very good job at disclosing. If you are still confused that means they did not do a proper job in disclosing all the terms on the loan. Some lenders allow you to transfer the appraisal. I would recommend to shop around and get a different opinion. 

@Albert Bui @Matthew Kwan